Concerns as Trump moves to reclassify marijuana

By : Amos

Date: 15 December 2025 2:02am WAT

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United States President Donald Trump plans to reclassify marijuana from Schedule I to Schedule III, sending cannabis stocks surging and boosting industry optimism.

Cannabis stocks surged at the weekend amid reports that President Trump plans to significantly ease federal restrictions on marijuana, sparking optimism in the industry.

According to sources familiar with the matter, Trump is expected to issue an executive order as early as Monday to reclassify marijuana from a Schedule I drug, alongside heroin, to a less-regulated Schedule III category, which includes substances such as steroids and Tylenol with codeine. The change would alter the tax treatment of cannabis companies and encourage broader investment in the sector.

The Washington Post first reported that Trump intends to instruct federal agencies to implement the reclassification, with Axios noting that the move could take effect early next year.

Trump had previously floated the idea in August, and industry experts say it was always a question of “when,” not “if.”

The move marks one of the most significant changes to U.S. marijuana policy in decades, potentially affecting taxation, medical access, banking, and federal enforcement.

While some industry leaders see long-awaited relief, others caution that rescheduling could expose existing cannabis businesses to new federal risks without providing full legalisation.

Despite the potential benefits, some cannabis leaders warn that Schedule III could introduce new criminal exposure under federal drug and pharmaceutical laws.

“I, among others in the industry, are very concerned that Trump’s news of rescheduling is a false flag,” said Josh Kesselman, publisher of High Times and founder of RAW Rolling Papers.

Kesselman warned that moving THC to Schedule III could allow pharmaceutical companies to dominate the market with synthetic THC while subjecting dispensaries and growers to enforcement under the Food, Drug, and Cosmetic Act.

“These new federal crimes include selling a prescription drug without a license, misbranding a drug, illegal distribution, and conspiracy,” he said.

Chris Fontes, Founder and CEO of High Spirits, echoed those concerns, saying many cannabis businesses would be unable to legally operate in a Schedule III framework without FDA approval and licensure.

Ed Groshans, of investment bank Compass Point, called the move “positive” for the cannabis industry, predicting that the Drug Enforcement Administration would finalise a proposed rule for the reclassification by summer. Bill Kirk, senior research analyst at Roth, highlighted that pending Supreme Court decisions on state regulations and federal cannabis prohibition could accelerate regulatory timelines.

Industry leaders expressed cautious optimism about the potential changes. Tilray CEO Irwin Simon said, “I’m a lot more optimistic than I ever have been,” while Shawn Hauser, partner at cannabis-focused law firm Vicente LLP, described a reclassification as a “partial victory,” noting that broader legalisation and regulatory reform are still needed.

Hauser added, “This is the beginning of a new era of public health policy. If implemented, it dismantles nearly a century of outdated drug policies that fly in the face of science and medicine.”

Cannabis stocks have struggled since the market mania before the COVID-19 pandemic, despite growing acceptance and easing state-level regulations. Tilray shares, for example, recently traded at just over $10, well below their September 2018 peak of more than $2,140, adjusted for splits.

With Trump’s expected executive order, the cannabis industry is eyeing a potential turning point that could reshape federal drug policy, encourage investment, and gradually normalise marijuana under national law.

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